Leeds-based marketing automation business Force24 resorted to more traditional funding methods after failing to gain funding from VCs with a London bias.
That is the view of the firm’s commercial director Nick Washbourne.
“We didn’t go down the VC route because we struggled to find the opportunities,” he told BusinessCloud.
“We looked at traditional methods, through banking, and found businesses that were more inclined to invest in Northern businesses.
“VCs seem to overlook the fact that there are tech companies outside London creating some amazing innovative technology.
“There is a London bias and talent to some degree is magnetised to London for that reason, but there’s also a lot of talent elsewhere.”
Struggles can come in the first place in actually getting in front of a capital-based investor – “you’re best off never approaching a VC, you always need to be referred,” he says, although he adds that he doesn’t think the lack of investment elsewhere is a conscious decision.
“They have attractive businesses on their doorstep so they just don’t need to look outside London,” he adds.
The founders of used car search website Carsnip attended about 100 meetings in 18 months to raise the funding they needed – $100,000 of which was secured over the phone from a US investor – but not a penny came from London.